QUESTION 2

Use the following for all parts of Problem 2:

The accounting team at Jumbelaya Inc. is preparing its annual financial statements. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statements are summarized below:

Balance Sheet		Current Yr				Prior Year
Assets
Cash	$	121,900			$	138,300
Accounts receivable		147,000				129,500
Merchandise inventory		111,000				120,250
Property and equipment		212,000				111,000
Less: Accumulated depreciation		(61,680)				(32,000)
Total assets	$	530,220			$	467,050
Liabilities:
Accounts payable	$	17,500			$	22,200
Salaries and Wages Payable		4,700				1,850
Notes payable, long-term		92,500				111,000
Stockholders' Equity:
Common stock		168,000				148,000
Retained earnings		247,520				184,000
Total liabilities and stockholders' equity	$	530,220			$	467,050
Income Statement
Sales	$	540,000
Cost of goods sold		280,000
Depreciation expense		29,680
Other expenses		135,000
Net income	$	95,320

Other information from the company's records includes the following:

Bought equipment for cash, $101,000.

Paid $18,500 on long-term note payable.

Issued new shares of common stock for $20,000 cash.

Cash dividends of $31,800 were declared and paid to stockholders.

Accounts Payable arose from inventory purchases on credit.

Income tax expense ($23,830) and interest expense ($5,550) were paid in full at the end of both years and are included in Other Expenses.

Problem #2 (15 points; 2 parts):

*Part a - 15 points) Prepare the statement of cash flows using the indirect method in good form.

*Submission Notes: Record your answers in MS Word, MS Excel, or on scratch paper (with neat handwriting) and email me your answers within five minutes of the close of your testing window (i.e. within 125 minutes of when you started your exam. If you handwrite your answers, you'll need to take a photo and/or scan and send your answers to me. Please be sure your answers are legible.

Part b - 0 points - check figure) Enter the operating cash flows from your statement of cash flows in the answer box below. Use numbers only (no symbols or punctuation)

*Note: Your score for this question will be based on your submitted statement of cash flows and not the check figure.